Glenn Morgan - Rainforests and Plantations | ParadigmShiftWe've heard about the future, starting with Don and moving into our panel of executives, and I just want to share a kind of interesting quote with you. Didier Bonnet, who's the Senior Vice President of Digital for Capgemini UK, he said, "the only wrong move when it comes to digital transformation is to make no move at all." So it's exciting, right, but it's also encouraging, because it shows us that just forward movement can get us going in the right direction. We heard about the future and obviously we have now no choice but to respond. We have to start by transforming all the elements of our business, and where more important to start than at the apex of rethinking our business models themselves? I think we all accept the fact that technology is no longer separate from business. It's no longer additive. In 2009, Forrester published an article that was a little bit contentious at the time, where they said, business units and technology unit would no longer be separate things, and they were the first ones to coin the expression "business technology," and they were referring to organizational structure itself, and we're so far past that at this point. We now look at that and say, well, of course, and what we've done is now take our business strategies and our tech strategies and munge them together as one. This takes incredible foresight, and it takes a lot of courage, and I can't think of another leader who could better exemplify being a courageous leader himself than Glenn Morgan, who's the head of Digital Transformation for IAG. Glenn's an interesting person anyway. He's a very courageous guy, even just looking at is his Twitter handle, which we'll put up here, you see this he's very much into Dakar bike-- this extreme bike racing. I found out from him a little known fact yesterday that he just recently won a race, and he took home the silver medal out of 400 participants, so that's pretty cool. But he takes that courage into the board room. One of my favorite clips of Glenn was from a couple of years ago actually when he was being interviewed in his new role at British Airways, and what he said was, he very cleverly and intentionally set aside the traditional title of CIO, and he gave himself the title of Head of Service Transformation. Why did he do that? He did it because, to Glenn, service wasn't just services like we think about them in technology, it was actually service to his customer, and he was quoted with the expression, he wanted to add value at every single touch point to really change his customer's experience. Please welcome Glenn Morgan. [APPLAUSE] Well, thank you very much for the kind introduction, and my Twitter handle as you can all follow. Today I'm going to sort of build on where Don started and sort of just highlight a few things. Look at Oculus. It started off with a guy wanting to raise $20,000 to do something that he was really passionate about. He raised $250,000 in less than four weeks, and he sold his company to $2 billion in less than two years. So the power of two exponential, if you look at it, $250,000 within four hours, it's an amazing achievement. If you move on, in terms of looking at Yo, one individual built an entire business, and there's a great quote from the CEO of Cisco just before he left, and he said, "when is it we're going to see a multi-billion dollar business with two employees, the CEO and the CTO?" And I don't think it's very far away. I think that the other thing is, who's heard of Slack? Who's using Slack? Look at it. It's a company that's less than 12 months old. Yammer, Jive, all of those, being wiped out quickly by something coming along disrupting the current business world. Innovation is following a really different pattern now, and I think that this is what the biggest challenge for corporates is, is that this innovation is following what I call the shark fin approach, and if we look at that, if you've been in business, what you would see is you see your standard bell curve. Innovators, early adopters, the early majority, sort of late majority, laggards, and most corporates sit there and say, I'll be in that sort of early adopters or the early majority space, because I don't want to make a mistake, I don't want to invest that, I don't want to take that risk, I can't afford to corrupt my business. And what you're seeing now is little blips in the marketplace, and Don's mentioned a few of them today. What is Blockchain going to do to it? It's interesting. Blockchain's being used by some of the biggest security firms already to actually build on, but these little blips in the marketplace, usually what they are is the ability for naysayers to say, look, I told you that wasn't going to work. This curve here, this shark fin curve here, can anyone guess what it is? Probably not, because I haven't put anything up that indicates what it is, but it is the Kindle. So Sony eReader was one of the blips here where everyone said, oh, no one's going to read from an electronic device, and Kindle comes along and takes the entire market just about overnight, and that's what we're looking at. So if you're in that early majority, you've lost, and that's what we've got to deal with as a corporate. And if move on, tech is really normal now, and there's a great book written by Peter Hinssen, and I think that you may have-- if you haven't already seen them, but you must see, but this is me. This is what Don was sort of talking about in terms of digital natives. This is the classic. When we talk about our young, how better than having an HTTP request for you Christmas list? And I've got a 6-year-old-- he's just turn 7 now-- and the interesting thing, he's probably one of my best tech advisors, because friction means he doesn't use-- and friction in a process-- so I can give him all the cool phones in the world, and I go here's this one, and he'll gravitate to the one that doesn't provide friction, and that's something really, really important that we must understand. In terms of it, I think that the competition, if you take something like International Airlines Group, now International Airlines Group, if you're not familiar with it, it's the parent company of British Airways. Iberia, which is the Spanish flag carrier, Vueling, which is a low-cost carrier equivalent to the Easyjets and the Ryanairs, and we've just purchased Aer Lingus as well, so we have four international airlines, and we've come together as a group, and the constant thing in the airline space is you've got most airlines will say-- they'll worry, they'll talk about their competition, they'll talk about this competition here. I talked to our CEOs about a 26-year-old with a credit card and access to AWS. That's our competition that we're dealing with. That's the ones that are going to disrupt us and take us out of our business and make us just a dumb pipe. So moving on from there, it's really happening, and I'll take you through a couple of experiences. You've already seen a couple of these already. Airbnb-- I think what you're seeing here is the fact that they've come along and they've built a platform overnight. During the soccer World Cup, 25% of all hotel rooms were provided by Airbnb. Over a million rooms a night now coming through Airbnb. It's the biggest hotel chain in the world. Uber. You just need to see the reaction from the normal taxicabs and everything like that. You see what's happening with that marketplace. The London cabs went on strike because of Uber. You see the challenge that it's done there. But, again, a platform, platform for change. What is the big secret of Uber? And everyone goes, oh yeah, I can see my car, and it's great and the experience is frictionless, because the biggest friction point was payment in a cab. Get out of an Uber cab, walk on, do your business. Taken all the friction away, and I think a lot of people missed the difference. We've also heard today about Tesla. My Global Innovation who works for me, he's got a Tesla, and he's head-- I've got an Audi. I've got a nice Audi, and since I've owned that car about 2 and 1/2 years, I haven't seen a single thing change for that car. It's the car that I got 2 and 1/2 years ago. He's had his Tesla for less than six months, and he's had four major software platform upgrades. I think Don mentioned about the upgrade, the autonomous upgrade that just happened last week or so, and basically he's had four major software platform upgrades, but his car's improved 20% power increase in that point. I'm sitting there with a 2 and 1/2 year old Audi, probably in the same price range as what the Tesla is, and it hasn't changed, and his car's adapting. It's a software platform, it's not a vehicle. It's a software platform that he's interacting with, and I think that's the real big difference. Tech is quite relevant, because in our side of the world, if you get it wrong, you crash and burn, and the thing here-- by the way, that's not me crashing-- but the thing here is that what everyone talks about, they don't talk about the failures, and you can see Bloomberg with Obamacare. The fact if you get the tech wrong, it's going to really burn you. So corporates are quite cynical. They see these young startups. It's OK for them to fail. A big corporate, an airline, can an airline have has some real big failures in its space? That's the real challenge, because we build our whole trust, our whole vision, on the fact that we're safe and secure, and I think that that's what we've got to get over, and the challenges, and we'll talk through a little bit later on how we do this. There's a real big shift in technology, and if you look at the value, I had been going at the value for years and years and, as I said, what you see here is that there are these paradigm shifts. Strange to use the word, but I call it an inflection point. Pre-web you had the shopping cart, the bricks and mortar of the world, the Blockbusters. Guess what? They've gone out of business. You see what's happening. The second big paradigm shift was the web, and we've been dealing with web and eCommerce and mobile and big data now for quite a while, and some people are getting really good at it. Take Etsy and a few others-- Amazon, all of those places. They've been doing very well, and what it's all about at the moment is extending channels, building optimizing channels, moving further. But I think the real key is there's another paradigm shift coming on. There is another inflection point that we're having, and lots of people haven't got it, and the word "digital" is being put around it. Digital [? Geo ?] [? Core, ?] digital DNA, digital first, mobile first, you name it, you get all of these things here, but I don't think people have really quite understood it, but I see this coming together of, it's not just about eCommerce, it's actually what I would call digital business or it's actually fusing the strategy and your business together. It's actually using all the technology capabilities that are out there. Adding, it's not just about your core businesses. It's about people, it's about processes, and it's about things. It's about interacting with the world. Today we know the context of everything. My bank should know I'm here on stage right now. So why does it stop me from taking 100 pounds of cash or $100 of cash out of an ATM machine, because two weeks ago I was in Madrid? I've been all over the place, and it thinks I'm a risk. Why doesn't it know that? And that's what we've got to change, and I think that this is a real big shift, and what we've done is we've put in a place, and I'll talk you through our process, what we've actually done to try and address this digital business space. Gartner put up a great slide, and it encapsulates what I've just said in those three big inflection points, those three big transitions, and what you'll hear and you'll see is a lot of business talking about the fact that they're doing digital, and actually they're playing in the blue space, they're playing in the web and eCom. They're about optimizing interactions, they're about expanding their channels. They say the company that says it's doing mobile first hasn't quite got it right yet, because that's not the inflection point. You need to be doing far more than that. You need to be introducing how do you use technology to disrupt business models, and if you look at the three that I gave you before-- the Airbnbs the Ubers, the Teslas-- if you take those, they have used technology to disrupt business models, and that's the real shift in what's happening out there, and that's the paradigm shift that the whole conference today and tomorrow is all about, and hopefully we can take you through and give you a few pointers. But I think that the key here is we're moving into this autonomous space, and Don set it up really nicely this morning on that side of things. Where is a business? We're not hiding, we're not putting our head in the sand, and a lot of businesses are, because the narrative that a business has is really struggling. They don't get this digital business. They can't quite understand it. It's happening too fast, too many things too quickly. You can talk to a CEO and say, are you familiar with Slack, and they're just going to look at you as if you're on a different planet. If you talk to them about Yo, they're going to go, Yo what? This narrative and explaining it to business is really, really tricky, and we need to be able to navigate that. Your strategy has got to come fluid, and we're ready for that, and I think our key mission is taking this digital disruption, this inflection point, this paradigm shift, and actually using it as a business transformation, and I think that that's fundamental what we're trying to achieve as my little group that we've got. The new pace is the speed of the network, and I think that Don articulated this really well this morning, that the actual pace, that the heartbeat of your business can no longer be the heartbeat with inside your business. The heartbeat of your business has got to be at the speed of the network, and the network is greater than just inside your business. It is the globe. There were some great examples of the gold mining companies and everything like that, but if you can leverage, you need to be as a business working at the speed of your business, because if you're not, you're going to fall behind. So this comes to my sort of theory, and you take away a theory, which is this is about plantations and rain forests, and if you look at it, I love the idea of plantations and rain forests, because plantations are really good at what they do and how you do it. If you have a banana plantation, you're really excellent in understanding how to make that bigger, better, more efficient, more effective, and that's where our corporates are today, but if you're a banana plantation, it's really, really hard to think outside of bananas. OK? Whereas the rain forest is quite scary. It's messy, it's dangerous. You get killed out there. There's a spider that might take you on, but also there's a spider that might cure cancer, and if you don't have that, you might not have a business. There's plenty of examples in our history, and if you look at the S&P, Fortune 500, and 1960s you could stay on there for about average of 62 years. It's less than 20 years about 10 years ago. It's now down to less than 12 years, and I think you'll move down to five years. Name some of the companies like Yo and Slack, billion dollar companies that we haven't heard of, and they're less than 12 months old. So this whole concept of how do we, as big corporates, know how we handle our plantations, we know how to give known results to the business in the city. It's what we've got to do. How do we extract the right richness of the rain forest, and I'll take you through little bits and pieces here. So what are we? So we're a lean startup. So our concept-- I always myself, I'm a recovering CIO, sort of like an Alcoholics Anonymous sort of thing. I just wish IT got this. So I introduce myself a lot of the time as a recovering CIO, and I've moved into the strategy side of things, and what we've done is we've actually created a lean startup, because our view is we don't need a digital business unit, and there's lots of businesses that have set up digital business units. I think that's wrong. We need every single employee to have a digital mindset, a cultural shift, a cultural change, and Don articulated that again this morning, and I think that's absolutely right. We're embracing those digital models. We're creating the ability to actually challenge business processes. I had a conversation with the CEOs of the Opcos, and they said, Glenn go out and break the rules, just don't break the law. And that's what we've got to do. We've got to bring that in and show how we can educate the rest of our talent across the pool. We've created a unique brand of capabilities, so we've done the bits and pieces, the role of it. We've got a disruption lab capability. We've got an open innovation network. We've got some accelerator programs. We're using Information Universe. We're using the data, the context and we're disruptive thinking, but we've put some differences onto it, and the disruption labs, we haven't put that out in the valley. We haven't put it out in Israel. We've brought it right into the heart of IAG office, right next door to the CEOs desk. So we've got a little glass box, and we tilted our desk on an angle, because we're different-- we've got the stand-up desks there-- but we've got multiple sets of alphas, multiple sets of betas, so instead of showing the CEOs another PowerPoint presentation or another 50-page business plan, we build it, and we show them and say, this is what we're talking about, and that's the real difference, putting that right in the heart of our executive office is really different, and it's interesting. We had the treasuries there as well, because that's the heart of the airline, and if you know airlines, we're very capital intensive. Planes cost quite a bit of money. But Treasury always trying to talk to the banks, and the banks walked around, and they gave us better rates, because they saw that digital was in the heart of the business. So putting something right in the heart of your business, creating that open innovation network-- Don talked about that-- I'm not proposed accelerator networks, et cetera. We've put our accelerators out there, so we've built on San Francisco-- we've been out in San Francisco. We ran a program called Ungrounded Thinking a number of years ago now, and that was our foray into San Francisco. It's so important to our business now that we're just opening a route to San Jose, direct from London into San Jose-- and that's coming this summer. It's going to be on that shiny new 787-900 actually, and that's really key, and we're starting to hook up. So we've got Aer Lingus, we've got Dublin, we've got Bangalore, Chennai, London, Madrid, San Francisco, Israel. We all fly to all those regions. We can actually connect the digital elements. We've put accelerators and incubators in there. We actually said, we're not VCs, we're an airline business. What we've done is we've tied in with VCs and accelerators to actually use them to sort-- put business problems. We just put a business problem out there and say, I've got this problem. Find me some interesting things, and it's interesting that Don was talking about the Blockchain. We are doing a heck of a lot a work around Blockchain at the moment, and part of our last incubator was a whole round of business problems, and how we can solve them with Blockchain. It's sort of passe to say, but data has got to be at the heart of the business. Information has got to be at the heart of your business. Every single data exhaust that you have, every single touch point that you have is there and should be utilized and extended, and not many corporates are doing that. They're locked up in siloed platforms or systems, and you would ask them, all your businesses will know where you are. It's probably not accessible today, but what you've got to be able to do is capture that information, interpret it and act on it, and that's really, really key. My takeaway, and this is the sort of paradigm shift that I'm seeing, so when people say, what is it? From a technologist's terms, it's about e equals mc cubed-- cheating slightly there in terms of it, but it's something easy to remember to take away. And, again, a lot of repeats from what Don talked about, but the enterprise, mobility, cloud, context, and context is another way of saying data or big data, that curation of context is going to be one of the biggest enablers of this, and if you start getting new enterprise, it's about that. And communities, leveraging the power of communities inside. The test that knowledge with inside your business and outside, the test that knowledge that's outside of your business is really key. You put that together as a business lens and look at your business problems with that lens, you come up with radically different ideas than what you have when you're trying to address that problem at a start point. Think big, act small, learn fast. You've probably heard that. I'd challenge that slightly, because actually this is something that we've been saying for about two years now-- two or three years-- is we need to act much more like a startup-- think big, act smaller and fast. The typical culture of a corporate is think big, act big, go slow, cost a lot of money. I think what we add to that is, think big, act small, learn fast, and scale quick, because you have the assets that a startup doesn't have. You have the marketing capabilities that a startup doesn't have. You have the sales channels that a startup doesn't have, so you can do one thing that they can't do-- you can scale faster. And what we've got to do is work out how to do that. The rule of thirds as well. I think it's really, really important that if you do this, is to actually think about how you split your time. It's so easy that you could just embed yourself in talking to the industry, looking at the listening posts, these sorts of events here, and speaking with it and then go back to your business and go, I just don't understand why they don't get it. And that's right, because you've got to balance that time. You've got to get half of your-- a third of your time actually in the industry, trying to change the industry. You've got to look at delivering transformations as another third and then, as I said, working with your business units. You've got to educate. You've got to change that culture. If you don't get that balance right, then what you end up doing is tilting the layer, and what you end up with is-- and I've seen a lot of this where you've got there's some great corporates that have got incubator offices out in Israel and everything. They have great shiny offices, they've got fantastic innovations, and you go back to their corporate headquarters, they won't have a clue about those innovations. They're not getting into the heart of the business, and that's where it's really important. And your DNA-- and our DNA is Decide Now Act, and you've got to put the comma wherever you like, so it's like decide, now act or decide now, act. And you can use that however you like, but it's really important. You've got to move. You've just got to get on with this. There's no play book out there. There is not a single corporate that knows how to do this, and we're all going down this journey and, as Don said, we're only halfway there. If you imagine the printing press, imagine halfway along the journey of the printing press. The next half, you just cannot imagine what's going to happen, and so us saying what's going to happen is not really there. But I think it's really key, and we've just got some three simple rules in our group. Is it deliverable, is it operable, and is it scalable to the Group? And those are the three rules that we look at, and it's really simple, but our DNA is simply act. We have a bunch of operating methods, and you're pretty familiar with these. I'm not proposing to talk about them. The standards for an agile life cycle-- design thinking. A triage is a two-hour workshop where we actually come out with a decision. We don't leave until we come out with a decision, but that was all about continuous improvement. The big thing that we missed was we created something-- we called it the Catapult, because what we weren't doing is those other operating methods were about continuously improving what we've got. It didn't break us away from where we needed to go, and what we've done is we've created this disruption program, and ThoughtWorks kindly helped us facilitate this program. We did it a few months back now, and this disruption program is an eight-week program. We took a gang of five leaders. There's no point in me going along to the Commercial Director of British Airways and saying, you're doing your data piece wrong, you should do it like this. He's going to tell me where to go quite quickly, right? But if we can take a real trusted leader out of his organization for very short time, put it in, and immerse him in this digital business, and he can see and touch and feel this, then he's now saying it, not just me, and that's a real big power difference. Our program basically is an eight-week program, and so what we did is we did a digital immersion SWAT, so first week we took them to the valley. We took them to the Singularity University, Andreessen Horowitz. We took them to the biggest Blockchain VC company. You should have seen them scratching their head. We took them to businesses that were disrupting our business. The second week's called Doomsday Cycle. You actually review what business-- what you've seen the first week, which gets you off on big high, and the second week is, my god, our business is really, really screwed, and you can show, and I can scare any business-- just take them for a week in the valley or into Israel, and you can scare them. Then we did a clean sheet. We said, well, if we started from scratch, if we didn't have to worry about all that legacy, all that crap, 92 years of history, how would we go? We'd start with a clean sheet, and we move on from that. And then with second week of this trip, we had our team, this gang of five people, in front of customers, very uncomfortably. You can take the head of Sales and Distribution from British Airways trying to sell an idea of a sketch about this is what we're planning to do, this is the idea to do, but it's really interesting, because you're learning straight away, you're acting on some of those insights, and you're iterating those insights. And then we sort of evaluate and evangelize and prototype, prototype, prototype, and then we move on, and we build and demo and iterate. This program was headed off by Group CEO, Willie Walsh, and he said there, I don't want to tell you. I just want you to go and just don't-- there is nothing here that is out of bounds. You go out and look and find and build, because that's what we need you to do. We met in the middle, and we followed up at the end, and the program's been hugely successful. Our first Catapult is going to transform how we do selling and servicing, and we're going to build on an infinite, scalable set of operating assets that we have as in the carriers. How much can you achieve? This eight weeks, it was over 250 ideas, and they're not small ideas. These were big ideas. It was four massive big transformations. We built 25 prototypes, we'd had 20 international customer testing systems, and we had three live working software, and one of the working software platforms that we put out there, we had it out there, and it was a program in one of the Opcos that was due to deliver in 36 months, and we've done in eight weeks, and we had it live, and that is transformational. I think that the key thing here is that moving on from it, there's a bunch of stuff that you can look at, and some of the themes that we're looking at across these Catapults is there's a whole pile of technology that's out there and, again, Don mentioned it. I think the one thing that he didn't mention was biometrics, and I think that that's really one of the big things. He sort of mentioned it in terms of Apple Pay. The interesting thing about Apple Pay is the friction point again. Banks have got a real headache here. I was having a conversation with some colleagues last night and I said, I can't remember what card I used when I used Apple Pay. It's just by default. It's so frictionless. The Apple TV come out. One of my Hacker in Residence came out and he said, I've got this thing here, and it basically said-- the fact was, within four seconds I bought an Apple TV, because it knew my context, my biometric was there. And for our business, there's a huge amount of stuff that's going on, and Don's mentioned them, and I would say that the 10 points that Don put are absolutely fundamental. Robotics. I'm just going to show you an area that we've been working on. Robotics for an airline. You think, well, so what? Actually, for an airline, robotics is actually one of the best areas for robotic companies to work with us and for us to work with them, and we're doing quite a lot of work. You can see the vision of an autonomous airport. Just watch. It's going to be here, and we've been doing quite a bit of work around cargo and delivery, as many others have done, and I'll just take you through a little video. What happens is the outcome for us, what are the big outcomes? And I think the key thing for us is the outcomes that we've been looking at is creating a new way of innovating, giving everybody in the corporate that digital mindset, and I call it the Human API. My titles in my team are called Human APIs. They're about connecting people. You can't imagine the conversation I had with the HR department when I said, what's the title, and I said Human API, and they're going, sorry? The worst one was Hacker in Residence, and the IT security guys actually barred him access, because my Hacker in Residence was barred access to some of the systems, because they thought he was a hacker. I think that that was key. But the human API, connect people, connect outside, connect communities. Take that e equals mc squared and get a unique warning system for your business. Put that together, get everyone with that digital mindset. Bring value from disruptive technology, but transform your business models. Take what you've got, transform those business models with disruptive technology, and then finally my task is really not about predicting the future, but it's making sure our business is really well prepared for it, and I think that still applies-- that principle there is absolutely-- if anyone can tell me what's happening in five years' time, I just don't believe them. There's a lot of things that we can predict and be prepared for, but predicting exactly what's happening-- who would have envisaged Slack five years ago? And those sorts of things so, for me, that's a little take away. That's a little bit about what we're doing, and hopefully you've got a few little points that you can take away, and I'm around all this week, so thank you. [MUSIC PLAYING]

Head of Digital Business Transformation at International Airlines Group (IAG)

Glenn is a globally recognized thought leader in the travel, aviation, and technology sectors, plugged into emerging innovation, social and digital trends. He is currently Head of Digital Business Transformation at IAG, the parent company of British Airways, Iberia and Vueling and is also the Chair of IATA’s Simplifying the Business (StB), and Co-Chair of oneworld CIO Board. Previously Glenn worked in Dubai for Emirates Airline. Glenn holds a Black Belt in Six Sigma and is also a specialist Lean practitioner.

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